ASL Marine’s 3QFY15 profit plunges 57.5%

Singapore shipbuilding group ASL Marine said on 12 May that its profit for the third quarter of financial year (FY) 2015 fell 57.5% to SGD2.1 million (USD1.57 million) as demand for offshore support vessels fell with the collapse in oil prices.

ASL Marine chairman and managing director Ang Kok Tian said, “Lower oil prices have led to fewer new shipbuilding orders for offshore support vessels. As oil majors cut their capital expenditure budgets, newbuilding projects have slowed down, been put on hold, or have been cancelled. While the shipbuilding segment encountered a setback in late 2014 due to the harsh business environment, there have been stabilised progress at our other segments.”

Ang said its ship chartering results were stable as non-offshore related vessels, such as tugs, work barges, dredgers, and tankers, were less impacted by the offshore market, and the vessels benefited from the lower logistics costs brought by lower oil prices.

Ship repair and conversion, as well as engineering segments, saw improved gross profits and margins in the same quarter.

As at 31 March 2015, ASL Marine had an outstanding shipbuilding orderbook from external customers of approximately SGD257 million for 18 vessels, with progressive deliveries up to the second quarter of FY 2017.

Its orderbook comprised anchor handling tug supply vessels, tugs, a seismic support vessel, and a tanker.

ASL Marine also has had an outstanding orderbook of approximately SGD58 million with respect to long-term ship-chartering contracts.

The company expects to turn in a profit for this year.

Ang said, “With our established and comprehensive business structure, the group is resilient enough to be financially stable in the weak market. The upcoming major infrastructure projects in Singapore, Malaysia, and Indonesia are expected to improve the demand for our support equipment, and hence stimulate our ship chartering business. We will spare no effort in working with our customers to explore business opportunities, and we will continue to implement the strategy of maximising deployment, enhancing and renewing our fleet to better meet customers’ needs.”